IBM reporting boost in sales of hardware

POUGHKEEPSIE — Oracle's purchase of Sun Microsystems has had the unintended consequence of benefitting IBM — and providing some sense of job security for workers here.

George Spohr

POUGHKEEPSIE — Oracle's purchase of Sun Microsystems has had the unintended consequence of benefitting IBM — and providing some sense of job security for workers here.

In a bit of irony — IBM originally planned to purchase Sun, only to be outbid by Oracle — Big Blue is seeing a sharp spike in lucrative, buy-in-bulk customers.

In various trade publications, those customers have cited a lack of public commitment from Oracle to continue Sun's product lineup as the reason they're jumping ship.

That's good news for IBM Poughkeepsie, where some of the company's most powerful — and expensive — mainframe computers are made.

And it's a reversal of trends for a company that, in recent years, has focused more on service and support than on solely making hardware.

"Customers are turning to IBM servers because of the long-term investments we make in technology," IBM spokesman Mike Corrado said. "The mainframe and Unix servers we manufacture in Poughkeepsie, for example, are among the most innovative computers in the world."

When the company released its third-quarter earnings report earlier this month, CFO Mark Loughridge dropped hints that its underperforming hardware units were about to see a rebound.

Information provided by IBM about customer defection from Sun suggests that rebound is now happening.

The company said 235 customers moved their business from Sun and competitor Hewlett-Packard to IBM in just the past quarter. That's resulted in hundreds of millions of dollars in new revenue in that three-month period.

So far this year, IBM has won 400 customers away from Sun and 200 from HP.

All told, some 2,000 more business customers are using IBM servers and storage now than were three years ago.

"The servers we build in Poughkeepsie are among the world's most powerful," Corrado said. "Customers use them to consolidate hundreds of smaller machines," saving them money.

With more than 9,000 employees in Orange and Dutchess counties — mostly in units that make hardware — IBM is the region's largest private-sector employer.